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IDBI Bank moved Supreme Court on Tuesday seeking modification of its order staying insolvency proceedings against Jaypee Infratech.

Earlier on a petition by home buyers, the Supreme Court had stayed the order passed by National Company Law Tribunal which had declared Jaypee Infratech as insolvent. The stay order had been issued following a petition filed by a clutch of customers who bought homes in the company's projects. The court will next hear their petition on 10 October. The apex court also issued notice to Finance Ministry, the Reserve Bank of India and the Uttar Pradesh government. In addition, a notice has also been sent to the Ministry of Corporate Affairs and IDBI Bank.

A bench headed by Chief Justice Dipak Misra ordered the stay on a public interest litigation (PIL) by Delhi resident Chitra Sharma, who has booked a home in a Jaypee Infratech project. Homebuyers in Jaypee Infratech projects were required to fill up forms to register claims in the corporate insolvency resolution process against the firm by 31 August. “A total of 32,000 people are being affected and have been left remedy-less,” Aishwarya Sinha, lawyer for Sharma, said. In a 9 August order passed by the Allahabad bench of NCLT, liquidation proceedings against Jaypee Infratech were initiated under the Insolvency and Bankruptcy Code of India (IBC), 2016. Jaypee Infratech has defaulted on Rs. 526.11 crore of loans outstanding to IDBI Bank Ltd. Jaypee Infratech is a subsidiary of Jaiprakash Associates Ltd.

Sharma’s plea sought a stay on the NCLT order, and urged the court to conduct a forensic audit of Jaypee Infra and Jaiprakash Associates. As per the NCLT order, it is mandatory for homebuyers to submit forms B and C issued by the insolvency resolution professional (IRP) which pertain to financial creditors. However, on 16 August, IBC was amended to include homebuyers as another category of individual creditors. The petition submitted that such an order was forcing homebuyers to submit themselves to the jurisdiction of the IBC, even though it does not cater to their interests.

Jaypee Infratech was among the 12 companies, where the Reserve Bank of India (RBI), through its 13 June directive, had asked banks to file insolvency petition.